West Texas Intermediate crude rose for a second day to trim its third weekly drop, the longest losing streak since November. Brent climbed above $100 a barrel.
WTI advanced as much as 1.2 percent in New York. Prices increased the most in three weeks yesterday after the 14-day relative-strength index sank below 30 on April 17, a signal that the market is oversold, data compiled by Bloomberg show. Futures may decline next week on signs that economic growth is slowing, according to a weekly Bloomberg News survey.
“We would expect a rebound,” said Miswin Mahesh, an analyst at Barclays Plc in London. “This year we’ll see very good demand growth,” and the seasonal weakness in demand is “something that we think is very transient, very temporary,” he said.
WTI for May delivery increased as much as $1.06 to $88.79 a barrel in electronic trading on the New York Mercantile Exchange and was at $88.14 at 1:42 p.m. London time. The contract climbed 1.2 percent to $87.73 yesterday, the biggest gain since March 26. The more actively traded June future was up 39 cents at $88.39 today. Trading in WTI futures was 11 percent above the 100-day average. Prices are down 3.5 percent this week and are 13 percent lower than a year ago.
Brent for June settlement on the London-based ICE Futures Europe exchange rose as much as $1.20, or 1.2 percent, to $100.33 a barrel. The front-month European benchmark grade was at a premium of $11.49 to WTI futures. The spread was $10.72 on April 17, the narrowest closing level since Jan. 25, 2012.
Brent may fall below $95 a barrel in the “near term” if the global recovery stalls, and may slide into a range of $90 to $100 if world economic growth weakens to 3 percent from 4 percent, Francisco Blanch, the New York-based head of commodities research at Bank of America, said in an e-mailed report yesterday. Brent last traded at $95 in June.
Barclays and BNP Paribas SA are among banks that have said this week oil’s decline is temporary.
WTI rebounded in early March after its relative-strength index slid below 30, a technical indication that futures have fallen too quickly and further losses aren’t sustainable. Today’s reading is about 36.2.
Thirteen of 27 analysts and traders surveyed by Bloomberg forecast WTI will fall through April 26. Eight respondents, or 30 percent, predicted an increase. Six said there would be little change.
The International Monetary Fund lowered its global economic growth forecasts for 2013 on April 16. The projection for the U.S., the world’s largest oil consumer, was cut to 1.9 percent from 2 percent. China, the second-biggest crude user, was reduced to 8 percent from 8.2 percent.
The Organization of Petroleum Exporting Countries will cut crude shipments this month as economic weakness constrains demand and refiners finish maintenance, Halifax, England-based Oil Movements, a tanker tracker, said yesterday in a report.
To contact the editor responsible for this story: Stephen Voss on email@example.com